The National Credit Bureau (NCB) has expressed concern about a potential rise in informal debt amid subdued loan growth in the banking sector and an easing household debt-to-GDP ratio.
A woman walks past an ad promoting informal loans. A potential rise in informal borrowing is worrisome, particularly amid subdued credit growth in the banking sector and a declining household debt-to-GDP ratio. (Photo: Weerawong Wongpreedee)
Given sluggish loan growth and ongoing deleveraging in the banking industry, the country’s household debt-to-GDP ratio is expected to remain broadly stable this year.
However, the ratio could ease on a year-on-year basis if the new government introduces stimulus measures and GDP rises, said Luxamon Attapich, chief executive of the NCB.
Although the ratio may decline, the overall level of household debt is expected to remain high, as household incomes have yet to recover fully. This remains a key factor undermining borrowers’ debt-repayment capacity.
“While demand for personal loans remains robust, overall credit growth in the financial system continues to be subdued. Under this scenario, we are concerned about a rise in informal debt,” she said.
According to the National Economic and Social Development Council, Thailand’s household debt in the second quarter of 2025 stood at 16.3 trillion baht, down by 0.3% from the previous quarter.
This represented 86.8% of GDP. Despite the decline in outstanding debt, non-performing loans (NPLs) continued to rise, reaching 9.11% of total loans.
Ms Luxamon said limited access to formal credit would affect household liquidity as well as the cash flow of small enterprises and micro businesses, potentially pushing them into the informal debt system. However, the NCB does not have reliable data to accurately assess the size of informal debt.
The NCB is currently compiling credit data for December and for the full year 2025, which is expected to be finalised shortly.
Based on preliminary estimates, the household debt-to-GDP ratio for 2025 is projected to rise slightly, by less than one percentage point year-on-year.
With the formation of a new government underway, Ms Luxamon said policymakers should prioritise economic growth to help raise incomes of households and small and medium enterprises (SMEs). Higher incomes would strengthen debt-repayment capacity and help ease the country’s household debt problem.
She added that fresh fund injections and NPL resolution are also needed as part of an integrated approach to support vulnerable groups.
On NPL resolution, the NCB has signed a memorandum of understanding with Sukhumvit Asset Management (SAM) under the “Clear Debt, Going Forward” scheme.
SAM is expected to begin reporting qualified borrowers, based on NCB data, to financial institutions this month, with the programme to be expanded in the next phase.
Regulatory agencies have also rolled out the “SME Credit Boost” scheme to support SME lending through a credit-guarantee mechanism.
However, Ms Luxamon said both special-mention loans and NPLs, particularly in the SME segment, had tended to rise in December last year, based on data currently being compiled by the NCB. The bureau does not collect data on re-entry NPLs, but it is believed that such cases have occurred even after borrowers completed debt-restructuring programmes.